Here is what you need to know on Tuesday, August 24:
Markets remain upbeat after the FDA fully approved Pfizer’s covid vaccine and as expectations of Fed tapering wane. Concerns about Afghanistan and the virus are pushed away, sending the safe-haven dollar down and gold up. Cryptocurrencies are off their highs.
Shot in the arm: The US Food & Drug Administration (FDA) has fully approved the Pfizer/BioNTech COVID-19 vaccine, allowing institutions and companies more leeway in requiring immunization. This inoculation had only had emergency authorization. The news on Monday sent stocks higher despite early reports of such a move.
No rush to taper: Investors continued responding to falling chances that the Federal Reserve would taper its bond-buying scheme. Fed hawk Robert Kaplan showed readiness to change his outlook and the bank’s decision to hold its Jackson Hole Symposium virtually implies the Fed would not withdraw stimulus when it is forced to scale back operations due to the Delta variant.
The upbeat mood has sent the dollar down, with currencies shrugging their own issues. EUR/USD is trading around 1.1750 despite a drop in Germany’s Manufacturing Purchasing Managers’ Index. GBP/USD recaptured the 1.37 line, shrugging off a plunge in UK Services PMI. Both countries are suffering from high covid cases.
AUD/USD is above 0.72 and NZD/USD is topping 0.69 on greenback weakness, disregarding prospects of longer lockdowns in both countries. USD/CAD has dropped to around 1.26, with the loonie benefiting from the rebound in oil prices. WTI leaped to $65 amid improving prospects.
Gold has hit $1,800, benefiting from the upbeat mood and the calm in US Treasury yields. The precious metal’s price has finally broken out of range.
US New Home Sales and the Richmond Manufacturing Index stand out in an otherwise light day on the economic calendar and ahead of more significant releases later in the week.
Investors also have one eye open to the virtual G-7 meeting focused on Afghanistan. The US is set to leave on August 31 but allies urge extending the mission to assist in evacuation efforts. Staying longer could complicate the mission.
Cryptocurrencies are off their highs with Bitcoin hovering below $50,000 and Ethereum cooling toward $3,300.
Read More: Dollar dives, gold shines on full vaccine approval, falling taper